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Sukhilala is alive

You have a good case for damages against the bank if they persisted in trying to recover the money even after they had been advised about the facts in the case.

Harsh Roongta

04 Jan 2010

My father aged 69 years was retired and
staying with me. He had a credit card since the last 15 years. He expired last
year in October and since January this year I have been harassed by phone calls
from the bank claiming that there is an outstanding of Rs. 32,000 on his card.
Now they want me to pay this outstanding. Is it legal for the bank to demand
the dues of the father from his son? What should I do? - Rajesh Batra,
Gurgaon*.

As soon as I saw this query on our Ask the
expert section of Apnapaisa, the memory of late Bollywood actor Kanhaiyalal
(who played money lender Lala in Mother India) flashed in mindCirca 1959.

Here was the new age Kanhaiyalal (Circa
2009) who is passing the debt baton from one generation to another'till now I
thought that times had changed. The tradition of passing the debt from one
generation to another was long dead say since independence.

I always felt that the Lala - the
villainous moneylender in old Hindi films notably Mother India extracting
money from sons for loans taken by their father was more a caricature than the
truth. But here was Rajesh with exactly the same dilemma in 2009.

To rescue people like Rajesh, I consulted a
few legal expert friends who gave me the low-down on this:

1) First they corrected me about the Mother India analogy. In Mother
India the father (played by Jaani Raj Kumar) had mortgaged his farmland for
taking the loan. Hence the repayment was forced from the heroine (the
incomparable Nargis) and her two sons because they were emotionally attached to
that land and wanted it to be released from the moneylender's clutches. If they
had refused to pay, the moneylender could have proceeded to take possession of
the property and sell it to recover his dues along with interest (at a
draconian rate). In the case of Rajesh's father, it was an unsecured loan,
hence clearly this was not applicable.

2) Second the bank only had the ability to proceed against the estate
of the deceased. So Rajesh would be liable for the credit card debt only if he
had inherited something from his father and that too, up to the value of what
he had inherited.

Acting in accordance, I wrote to Rajesh to
check if he had inherited anything from his father. He mentioned that he only
inherited some personal stuff (such as a ancient copy of Ramayan that his
father had nurtured his entire adult life) with almost nil economic value. We
told him to write to the bank giving all these details and if they still
persisted to file a complaint with both the RBI as well as the police for undue
harassment. My lawyer friend also advised him that he would have a good case
for damages against the bank if they persisted in trying to recover the money
even after they had been advised about the facts in this case.

Rajesh accepted the advice and wrote to the
bank. Post that the recovery calls from the bank stopped.

However the story had an unexpected ending.
Rajesh checked with me whether his fathers name would show up as a defaulter in
the Credit Bureau's records. I informed him that I was not sure of how the
bureau dealt with records of people known to be deceased but it was most likely
that his father's record will show up as a default for the next 7 years. This
was not acceptable to Rajesh as he said that his dead father had led a
blameless life and had never defaulted in his entire life. Rajesh said that he
would settle up with the bank to ensure that his dead father's name was not
sullied anywhere. Last I heard he was in the process of settling the bank's
dues to get the name of his father cleared.

For me this was an extra ordinary ending as
it highlighted not just Rajesh's love for the memory of his dead father but
also the efficacy of the newly established credit bureau to bring down the overall
outstandings in the retail lending scenario.